Quote:
Originally Posted by StillwaterTownie
Ha, you're so wrong it's pitiful. Whether a higher paid worker is unionized or not, that extra money has to go somewhere and much of it will go to local businesses, insuring them profibility and ability to keep paying their workers and possibly hire more. These are facts you can't discount or try to run away from.
|
You have such a fundamental misunderstanding about economics, that I don't even know where to begin.
You are pretending as if higher wages means prosperity. What you fail to realize is that nominal wages has absolutely nothing to do with prosperity. Whether you get paid $5 an hour, $10 an hour or $50 an hour, only matters if it is relation to something else.
For instance, if the price of bread is $1 and you earn $5 an hour. Then for every hour of work, you can buy five loaves of bread. If bread is $2 and you earn $10, then you still earn the same number of loaves of bread per hour, regardless of the doubling of your pay.
When we talk about unions, a lot of times people discuss wages. That unions help to raise wages. But what are wages? What is money anyway?
Money is nothing within itself. What money really is, is a carrier of time. Basically, it is a way of carrying the value of my time in exchange for someone else's time. Basically, I can trade an hour of my work for an hour of someone else's work. Or I can exchange an hour of my work for 10 minutes of work from six different people(and so on and so forth).
The value of what I can purchase with my money is going to be in proportion to the value of other peoples time.
Look at it like this. Lets pretend we doubled everyone's wages tomorrow. Does that mean everyone will be twice as rich as they were before? No, the reality is that, at best, nothing would change. And at worst, it could put a lot of people out of work, because the costs of producing goods could rise so high to no longer make them competitive.
Imagine it like this. If you had five people producing different kinds of goods. They can only produce a given amount of goods. The wages themselves are only important because wages allow them to trade with each other. Whether or not they were getting paid $1 an hour, $5 an hour, or $500 an hour, doesn't really matter by itself. It only matters in relation to the other wages.
In this relationship, you might hope that all five people are paid equal wages in relation to the amount of time each of them invest in their product. But since each product is different, and requires different skills, its unlikely that each of them will get paid exactly the same amount as everyone else.
But lets say for instance, one of them makes clothing, one produces corn, one produces wheat, one produces lumber, and one has cattle.
Well, lets pretend that one year, the corn farmer produces 500 bushels of corn. The wheat farmer produces 300 bushels of wheat. The clothing manufacturer produces enough clothes for all five men to have four new sets of clothes each. The lumber producer makes the equivalent of 1,000 2x4's pieces of wood, and the cattle-man produces 2,000 pounds of beef.
How much should a bushel of corn cost? How about a bushel of wheat? How much for a pound of beef? A set of clothes? How much for the lumber? What if the following year the corn farmer produces more corn than the previous year? Or what if he produces less?
Lets pretend that instead of five people, these are five industries, employing hundreds of people each. And lets pretend that the clothing manufacturer unionizes, and now their wages are twice as high as they were before, but now the cost of clothing doubles from where it was before. Are the union workers better off than they were before? Yes. Are the non-union workers better off than they were before? No, they are worse off.
The reason is that, by the clothing manufacturers unionizing and raising their wages up. They now have more buying power. But there aren't more goods to actually buy. So while the union workers can now buy a larger share of all the goods that are produced by everyone in society. The people who aren't unionized end up getting a smaller share of the goods that are produced.
The only way unions can both increase their own wages without taking away the buying power of others. Is if their increased wages came as a result of increased productivity. Basically, if they doubled their wages and productivity at the same time, they wouldn't necessarily make anyone worse off. Because the availability of goods would go up relative to their increased wages, and would equal out.
The problem of course is that, unions aren't more productive because they are unions. In fact, unions tend to be less productive than private enterprise in the same field. Thus, unions not only hurt non-union workers because their inflated wages strip away buying power from non-union workers. But also, their lower productivity lowers the availability of goods, which also drives up the cost of goods.
And even worse. Unions tend to be less competitive, but politically powerful. So in order to stay competitive, they constantly lobby the government for special protections and subsidies. These subsidies are taxes, paid for by everyone, that go to protect union jobs and their artificially high wages. And thus, not only are low-skilled workers hurt by the reduction of buying power by the artificially high wages of unions. But low-skilled workers also have to pay taxes to subsidize unions to keep them competitive in the world market.
Even more, unions protect large corporations and hurt small-businesses. Since unions can really only exist in large businesses. And because unions always seek to protect their members jobs. Unions lobby the government for protections for large businesses, and not for small businesses. Many large corporations are able to get tax-exempt status in cities, supposedly because they are "creating jobs for the local economy". While small-businesses aren't seen as job creators and thus don't get the competitive advantage of being tax-exempt.
Sometimes if a corporation wants to relocate to a city, the city or state will actually spend millions or billions building the manufacturing plant for them. Or will give them special licenses that they don't give to anyone else. The unions are effectively the protector of big-business. Because it is a mutually beneficial relationship. Unions can't exist without big business and the government.
The simple reality is that, unions hurt low-skilled and unskilled labor. They guarantee themselves a larger piece of the pie, and everyone else a smaller piece of the pie. To believe otherwise is completely delusional.
I understand what you are trying to argue, but you refuse to look at the bigger picture.
It is certainly true that if Stillwater could have a business that sold to other cities/states/countries, and then it doubled its prices(lets leave wages out of this for a second). Then twice as much money would flow into Stillwater than before. But, what does it really mean? Lets pretend that the additional money came from Oklahoma City. That would simply mean that Stillwater ends up better off, and Oklahoma City ends up worse off. It doesn't actually mean that society in general is better off.
It would be no different than if they taxed the people in Oklahoma City and gave it to the Stillwater. Its just a transfer of wealth. It doesn't mean that any more goods and services are available to purchase. Its just a manipulation of the markets.
For instance, if I was in Tulsa or Stillwater, I would absolutely despise Oklahoma City. To a large extent, the economy of Oklahoma City is protected by all the tax money spent here. Stillwater gets a lot of tax money spent there because it is mostly a college town, heavily subsidized by the government. Tulsa on the other hand, it doesn't even have a military base like Tinker. It doesn't have any major colleges. It gets kind of screwed when it comes to tax revenues.
I think part of the problem in many of these small cities. Is that, taxes eat away so much at their economies, that they have to constantly find ways to bring in money. I'm convinced a large proportion of the money brought into the local economies of many small towns, comes from retired people, spending their social security there. Its difficult for small cities to exist, unless they are driven by natural resources or military bases/prisons etc. Because more tax money goes out than comes back in. The government has far too much power over the economy.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
